The UK’s Telegraph Media Group (TMG) is being sold to a consortium led by RedBird Capital Partners (a onetime partner of the UAE-funded consortium RedBird IMI whose acquisition of the news brand in 2023 had been blocked by the UK government after political opposition).
Gerry Cardinale, former Goldman Sachs banker and founder of the US private equity firm which has been investing heavily in media on both sides of the Atlantic, has agreed to acquire control from RedBird IMI of the 170-year-old The Telegraph for £500mn. The Abu Dhabi sovereign fund is expected to become a minority investor, subject to UK government approval.
It is believed that RedBird has also agreed with other UK-based investors to participate in the bid, including the Daily Mail Group which is expected to provide cost-saving services including circulation subscriptions marketing – but not editorial. The Mail already sells ads for TMG and is co-owner (with News Corp UK) of its printer. It had previously provided a wide range of facilities (including offices and systems) for The Independent.
It is believed that the Daily Mail will take a 9.9% shareholding in the new owner which is thought likely to be approved by the UK government. The Mail and Telegraph share a politically right viewpoint. The tie-up may help the Telegraph to establish a strong presence in the US, where the Daily Mail has been a longtime digital leader and is now seeking to convert its free readership (also in the UK) into paid subscriptions. That is where the Telegraph will be especially useful.
While the Daily Mail collaboration is not yet confirmed, such an arrangement could be a huge win for the Daily Mail whose owner Jonathan (Lord) Rothermere has long wanted to bring together the politically compatible daily news brands together. The obstacle to actual acquisition by the Mail might always have been competition issues in the UK, although the apparent restriction on funding by sovereign wealth funds might also have made it impossible to achieve. If Rothermere is able to achieve a wide-ranging sales and service contract (and the consequent profit) while also generating subscription sales for the Mail and Telegraph, both newsbrands can win.
RedBird said its growth strategy would “include capital investment in the group’s digital operations to continue driving subscriptions, using best in class data analytics and Artificial Intelligence tools to expand the value proposition to its core subscriber base and potential new subscribers”. It would grow the brand internationally, with a focus on the United States where RedBird has a strong strategic presence across news, media and sports.
With this transaction, RedBird has emerged as one of the largest investors in UK media, sports and entertainment, with a portfolio including Premier League Champion Liverpool FC; All3Media, the UK’s largest independent television, film and digital production and distribution company; Fulwell Entertainment, one of the UK’s leading television, film and music production companies; Build a Rocket Boy, one of the UK’s largest independent video gaming and entertainment studios; and the pending acquisition of the UK’s Channel 5 TV as a result of Skydance Entertainment’s merger with Paramount Global.
Cardinale said: “This transaction marks the start of a new era for The Telegraph as we look to grow the brand in the UK and internationally, invest in its technology and expand its subscriber base. We believe that the UK is a great place to invest, and this acquisition is an important part of RedBird’s growing portfolio of media and entertainment companies in the UK. Having now spent time with Chris Evans (editor-in-chief of TMG), Anna Jones (CEO) and the entire senior management team at The Telegraph, we have tremendous conviction in the growth potential of this incredibly important cultural institution.”
Cardinale was aiming for the brand to become “a force in US and global journalism, targeting an intelligent centre-Right readership which is not currently well-served”. He is also said to want to expand The Telegraph’s successful travel and cruise offering (which includes eCommerce) and also build an events business (as previous TMG owners had done).
| Telegraph Media Group (ex Chelsea Magazines) SnapShot £mn | 2023 | 2022 | 2021 | 2020 |
| Revenue | 260 | 254 | 245 | 235 |
| Copy sales | 57 | 56 | 60 | 65 |
| Subs (%print) | 138 (51%) | 130 (55%) | 112 (62%) | 98 (68%) |
| Ads (% print) | 47 (65%) | 45 (73%) | 52 (79%) | 58 (74%) |
| Licensing etc | 27 | 23 | 21 | 14 |
| EBITDA | 60 | 47 | 40 | 39 |
| Margin | 22% | 19% | 16% | 17% |
| Headcount | 1,063 | 969 | 1,047 | 1,148 |
| Total subscriptions | 759k | 734k | 720k | 562k |
